goeasy Ltd. (TSX: GSY), (“
goeasy” or the
“
Company”), a leading full-service provider of
goods and alternative financial services, announced today that it
has completed the establishment of a new $200 million revolving
securitization warehouse facility (the
“
Securitization Facility”),
structured and underwritten by National Bank Financial Markets.
The Securitization Facility, which will be
collateralized by consumer loans originated by goeasy’s wholly
owned subsidiary, easyfinancial Services Inc., will have an initial
term of three years and interest on advances will be payable at the
rate of 1-month CDOR (Canadian Dollar Offered Rate) plus 295 bps.
Based on the current 1-month CDOR rate of 0.47% as of December 9,
2020, the interest rate would be 3.42%. The Company also intends to
establish an interest rate swap agreement to generate fixed rate
payments on the amounts drawn and mitigate the impact of interest
rate volatility. Proceeds from the Securitization Facility will be
used to repay amounts outstanding under the Company’s current
senior secured revolving credit facility (the “Credit
Facility”) and for general corporate purposes, including
funding growth of the consumer loan portfolio.
“The launch of a new securitization facility,
particularly amidst the backdrop of a challenging economic
environment, serves to highlight the strength of our business
model, the stability in credit performance and the positive growth
outlook for the Company,” said Hal Khouri, goeasy’s Executive Vice
President and Chief Financial Officer, “As a key step in the
development of our balance sheet, this new facility will broaden
our banking relationships, lower our cost of borrowing and further
diversify our sources of capital for maximum flexibility. Our
liquidity now increases to $410 million of total funding capacity
to support our future growth plans, while also reducing our fully
drawn weighted average cost of borrowing to 4.9%.”
Over the last eighteen months, the Company has
made several enhancements to its balance sheet, including
amendments to its Credit Facility and refinancing of its unsecured
Notes Payable. The Credit Facility was increased from $189.5
million to $310 million, while reducing the cost of
borrowing and extending the maturity from November 1,
2020 to February 12, 2022. Additionally, the Notes
Payable was refinanced and increased from US$475
million to US$550 million, while reducing the cost of
borrowing and extending the maturity from November 1,
2022 to December 1, 2024. Based on the cash on hand and
the borrowing capacity under the Company’s Credit Facility and new
Securitization Facility, goeasy has approximately $410 million in
total funding capacity, which it estimates is sufficient to fund
its organic growth into 2023. The Company is rated BB- with a
stable trend from S&P and Ba3 with a stable trend from
Moody’s.
About goeasy
goeasy Ltd., a Canadian company, headquartered
in Mississauga, Ontario, provides non-prime leasing and
lending services through its easyhome and easyfinancial divisions.
With a wide variety of financial products and services including
unsecured and secured instalment loans, goeasy aspires to help put
Canadians on a path to a better financial future, as they rebuild
their credit and graduate to prime lending. Customers can transact
seamlessly with easyhome and easyfinancial through an omni-channel
model that includes online and mobile, as well as over 400 leasing
and lending locations across Canada supported by more
than 2,000 employees. Throughout the company’s history, it has
served over 1 million Canadians and originated $4.7 billion in
loans, with one in three customers graduating to prime credit and
60% increasing their credit score within 12 months of
borrowing.
goeasy is the proud recipient of several awards
including Waterstone Canada’s Most Admired Corporate Cultures,
Glassdoor Top CEO Award, Achievers Top 50 Most Engaged Workplaces
in North America, Greater Toronto Top Employers Award, the
Digital Finance Institute’s Canada’s Top 50 FinTech Companies,
ranking on the TSX30 and placing on the Report on Business ranking
of Canada’s Top Growing Companies. The company and its employees
believe strongly in giving back to the communities in which it
operates and has raised over $3 million to support its
long-standing partnerships with the Boys & Girls Clubs of
Canada and Habitat for Humanity.
goeasy Ltd.’s. common shares are listed on the
TSX under the trading symbol “GSY”. goeasy is rated BB- with
a stable trend from S&P and Ba3 with a stable trend from
Moody’s. Visit www.goeasy.com.
Forward-Looking Statements
This press release includes forward-looking
statements about goeasy, including, but not limited to,
expectations regarding the use of proceeds and financial impact of
the Securitization Facility, the entry into and effect of interest
rate swaps, liquidity, funding capacity and anticipated growth. In
certain cases, forward-looking statements are statements that are
predictive in nature, depend upon or refer to future events or
conditions, and/or can be identified by the use of words such as
‘expects’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’,
‘budgeted’, ‘estimates’, ‘forecasts’, ‘targets’ or negative
versions thereof and similar expressions, and/or state that certain
actions, events or results ‘may’, ‘could’, ‘would’, ‘might’ or
‘will’ be taken, occur or be achieved. Forward-looking statements
are based on certain factors and assumptions, including expected
growth, market conditions, results of operations and business
prospects and are inherently subject to, among other things, risks,
uncertainties and assumptions about the Company’s operations,
economic factors and the industry generally, as well as those
factors referred to in the Company’s most recent annual information
form and interim and annual management discussion and analysis, as
available on www.sedar.com, in each case in the section entitled
“Risk Factors”. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future
events could differ materially from those expressed or implied by
forward-looking statements made by the Company. The reader is
cautioned to consider these and other factors carefully and not
place undue reliance on forward-looking statements. The Company is
under no obligation (and expressly disclaims any such obligation)
to update or alter the forward-looking statements whether as a
result of new information, future events or otherwise, unless
required by law.
For further information contact:
Jason Mullins
President & Chief Executive Officer
(905) 272-2788
Farhan Ali Khan
Senior Vice President, Corporate Development and
Investor Relations
(905) 272-2788
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